National and local TV ad spend in the US fell 4% year-over-year (YoY) in Q3 2017, according to Pivotal Research analyst Brian Wieser, per Business Insider.

The YoY drop caused TV's share of total ad spend to drop to 29% in Q3 2017, from 31% in Q3 2016. National TV broadcasts generated 57% of US media companies' total ad revenue in Q3, down from 59% in Q3 2016.

Contrary to popular opinion, a shift in advertiser budget toward digital isn't primarily driving this decline in ad spend on traditional TV:

Big brands are cutting their overall ad spend,according to Wieser. Large brands that have historically spent big on TV advertising have either reduced their total ad budgets or restricted ad budget increases to low single digits. Few of these large brands have upped digital ad budgets by double digits. Retailers and CPG brands have been especially hit hard. In 2016, the top 20 CPG companies saw zero to minimal sales growth, while smaller CPG companies averaged 2.8% growth, according to 13D research. Their struggles stem from Amazon's e-commerce dominance — the retailer accounted for more than half of all e-commerce growth last year — and the success of smaller upstart CPG brands.

TV is becoming a less compelling ad medium.Advertisers are adjusting to the massive pay-TV subscriber losses year-to-date and shifting some ad spend to digital media. Traditional pay-TV providers saw 872,000 in subscriber losses in Q3 2017, marking a 3.1% YoY increase from 559,000 subscriber losses. Moreover, roughly 2.6 million consumers cut the cord in the first three quarters of this year, while roughly 1.7 million did in 2016. Fewer pay-TV subscribers translate into a drop in TV viewership, making television a less attractive advertising venue.

And ad dollars are shifting from TV to digital. Prominent digital companies that are aggressively building out content libraries, like YouTube and Facebook, will likely be the beneficiaries. Right now, it's mainly e-commerce and small to mid-size brands that are focusing on digital advertising, according to Wieser. In the future, larger brands will grow their presence here, too, though the current digital advertising environment isn't ideal given the issues with brand safety, measurement, and transparency on platforms like YouTube and Facebook. BI Intelligence estimates US TV ad spend to grow from $73 billion in 2016 to $81 billion in 2021, and digital ad spend to grow from $70 billion to $107 billion over the same period.